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TSB reports slightly lower profit and retirement of chairwoman

TSB reports slightly lower profit and retirement of chairwoman

(2 June 2014 – New Zealand)  Kiwi-owned bank TSB Bank announced a small dip in profit on 29 May, but the biggest loss was the announcement of the retirement of long-term board member Elaine Gill.

Gill joined the bank’s board of directors in 1986 and became chairwoman 16 years ago.

TSB Bank chief executive Kevin Murphy said losing Gill would be like losing his right arm as she had lead the bank through a number of milestones.

One of the milestones, announced on 29 May was the bank’s deposits passing the NZ$5 billion (A$4.56 billion) mark.

TSB Bank reported an after-tax profit of NZ$50 million for the financial year ending 31 March, a 6 percent dip on last year's profit of NZ$53.1 million.

A dividend of NZ$10.2 million would be delivered to the people of Taranaki through the TSB Community Trust, leaving the bank with a retained profit of NZ$39.8 million.

The drop in profit indicated TSB Bank was not immune to the effects of the Government's Solid Energy bailout and it swapped NZ$13.8 million debit for the same value of redeemable preference shares in the struggling state-owned enterprise.

"The bank continues to receive interest on the remaining bonds held in the entity and is optimistic about the future of the company as it continues to successfully restructure its business," said Murphy.

The bank's deposits increased 4.4 percent on 2013 to NZ$5.2 billion.

Total lending increased 7.7 percent to NZ$3.1 billion compared with the previous 12 months' figure of NZ$2.9 billion.

Given the competitive lending environment, both Murphy and Gill attributed this to the diversification of the bank's portfolio, including a 56 percent rise in agribusiness.

"There's a lot of competition in the lending market and we're delighted with the result," Murphy said.

The bank had done so without compromising its risk profile, he said, and 90-day past due and impaired loans made up 0.36 percent of the lending portfolio.

TSB Bank's capital adequacy ratio was 14 percent, above the Reserve Bank of New Zealand's minimum of 10.5 percent.

Subject to the approval of the Reserve Bank, deputy chairman Bruce Richards will replace Gill at the helm of the board of directors.

Richards, a chartered accountant, has been on the bank's board since 1988. 

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